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Stock up! Price of cider to increase by 90% in Scotland

Scotland’s new 50p minimum alcohol unit price, which will come into effect on 1 May 2018, will raise the average price of sparkling wine and perry by 116% and the price of cider by 90%, the Institute for Fiscal Studies (IFS) revealed on Friday.
by Sophia Mosshttps://www.thedrinksbusiness.com/20...-unit-pricing/
Scotland’s supreme court ruled in favour of introducing minimum unit pricing last month, despite an appeal by the Scotch Whisky Association asserting that it was in breach of EU trade laws.

Scottish ministers have said that a minimum price of 50 pence-per-unit would help tackle alcohol abuse and alcohol related deaths in Scotland, by raising the price of cheap, high-strength alcohol, but there are concerns it will dampen competition and raise the cost of drinks across the board, while have little effect on restricting heavy drinkers.

Martin O’Connell, an associate director at IFS said: “Heavy drinkers, when buying alcohol in supermarkets and off-licences, tend to choose products that are cheaper per unit than more moderate drinkers. A minimum unit price would therefore target a higher share of the units that heavy drinkers buy. However, the policy will lead to substantial increases in alcohol prices that will also impact on many moderate drinkers.”

The ruling will see the price of cheap alcoholic drinks soar, with a 310cl bottle of Frosty Jack’s cider – currently sold at around £3.50 per bottle – set to increase to over £11.00 a bottle, while the cost of sparkling perry drink Lambrini will rise to over £5.60.

The IFS says that heavy drinking households are willing to switch away from a given product when the price rises, but they are more likely to switch to another alcoholic beverage than stop drinking full stop.

“Policies that increase the price of alcohol would only be effective at reducing harmful drinking if they induce problematic drinkers to switch away from alcohol,” the IFS report explained. “In the working paper, we estimate how different households respond to changes in the prices of different alcohol products. We show that, although the heaviest-drinking households are more willing to switch away from a given product in response to an increase in its price, they are much more likely to switch to another alcohol product, rather than to choose not to buy alcohol at all.”

70% of alcohol purchased in Britain between October 2015 and September 2016 was priced below 50 pence a unit, with the price of these drinks across the board likely to increase by an average of at least 35%, according to the IFS.

Those in the beer and cider sector will be hit the hardest. 85% of beer and 80% of cider is priced below 50 pence per unit, meaning the price of cider will rise by 90% in some cases, while the average price of beer could rise by 19%.

The minimum price threshold will also hurt the wine and spirits sector as 70cl whisky bottles will now longer be legally sold for less than £14 and wine bottles will have to be sold for at least £4.30.

There were 1,265 alcohol related deaths in Scotland in 2016, which is an increase of 10% (115 deaths) compared with 2015. The minimum alcohol price is meant to discourage heavy drinking, particularly when it comes to cheap liquor, and thus also reduce alcohol related injuries, illnesses and deaths, with the total annual cost of alcohol misuse in Scotland estimated to be around £900 per adult.

However there is no guarantee that higher prices will stop heavy drinkers abusing alcohol. In fact, there are concerns it could drive heavy drinkers to turn to other forms of substance abuse.

A statement released by Frosty Jacks representatives in November said: “(Making alcohol prices) more expensive or to restrict supply will merely displace misuse to another substance.”Read More Here